Summary: the total inventory of hot rolling this week is 5.2554 million tons, month-on-month-3.59%, year-on-year + 76.00%. Mainly due to this week's terminal demand has rebounded from last week, promoting the factory social library continued to decline, thus driving the general treasury continued to decline.

Hot rolling inventory comparison

Source: SMM Steel

Social inventory: hot rolled social bank 3.8766 million tons this week, month-on-month-3.31%, year-on-year + 84.65%.

Social inventory trend chart

Source: SMM Steel

Steel mill inventory: this week hot rolling mill warehouse 1.3788 million tons, month-on-month-4.37%, year-on-year + 55.50%.

Inventory trend chart of steel mill

Source: SMM Steel

Recently, the domestic central bank targeted reduction, foreign central banks have introduced economic stimulus policies, and some countries to slow the number of new confirmed growth and other good news continue to release, promoting the black disk continued to strengthen, leading to a marked recovery in the market mentality. Terminal procurement demand has also been released, thus speeding up the digestion of hot roll inventory, so that this week hot roll inventory continued to decline and social base decline expanded.

But it is worth noting that the factory library fell at a narrower pace this week than last week. According to SMM research, due to the poor cold system orders, cold rolling spot prices continue to fall, steel mills cold system production is in a state of loss, resulting in the majority of steel mills to reduce the production of cold system products, increased hot rolling production, so this week's hot rolling mill warehouse decline narrowed compared with last week.

Subsequently, with the further reduction of cold system products, the probability of hot rolling output continues to increase, thus aggravating the hot rolling supply end pressure. At the same time, the price of imported resources from abroad is on the low side, which suppresses the price of domestic hot rolls. As a result, it is expected that hot-rolled spot prices may weaken after the news is easy to digest.